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France set to falter on debt pledge to EU

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France set to falter on debt pledge to EU
French promises to cut public deficit look set to be broken new figures show. Photo: Kenteegerdin/flickr
16:48 CET+01:00
There was more bad news for France on the economic front on Tuesday when new figures from the EU suggested they were not going to meet a promise to cut its public deficit. But there were some reasons for Paris finance chiefs to smile.

France is set to breach promises to cut its public deficit, according to new figures from the European Union suggesting the country's deficit will remain above the 3.0-percent ceiling in 2014 and 2015.

The EU's winter economic outlook, released on Tuesday, suggested France's deficit will climb to 4.0 percent of output this year and remain at 3.9 percent in 2015.

Following the release of public deficit figures last year, the French government had promised to keep its deficit beneath the EU's 3.0-percent ceiling, predicting public spending cuts would keep the deficit beneath 2.8 percent for 2015.

However, the EU's outlook suggests economic growth in France is set to pick up, reaching 1 percent this year and 1,7 percent by 2015, in line with economic growth predictions for the rest of the Eurozone.

The growth comes as a result of what the EU has described as a "timid recovery of internal demand" in the Eurozone, boosted by an improvement in consumer confidence.

On Tuesday, European Commission Vice President Olli Rehn welcomed the expected growth in both the Eurozone and the EU.

"It is good news that economic activity has also started to strengthen in the vulnerable countries," Rehn said.

The forecast has also predicted that Spain will be unable to honour its commitment to reduce government debt, which is expected to reach 5.8 percent this year and grow to 6.5 percent in 2015.

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